Rearrange as \[r_t = \beta_1 r_m + (1-\beta_1)r_{ft} + \cdots + \beta_6 \text{MOM} + \alpha + \varepsilon_t\]
The part
\[\beta_1 r_m + (1-\beta_1)r_{ft} + \cdots + \beta_6 \text{MOM}\]
is a portfolio of the market, risk-free rate, and other factors that has the same betas as FMAGX.
- It is a benchmark for the performance of FMAGX.
\[\alpha + \varepsilon_t\]
is the return of FMAGX above the benchmark.
The average return of FMAGX above the benchmark is \(\alpha\).
The plot shows how the return of FMAGX in excess of the benchmark has varied over time.